The world markets have staged a strong recovery from the lows hit in April 2009, yet the US and European markets are still at levels they were in 1999! The emerging markets (including South Africa ) have fared better yet are still at 2007 levels.This recovery from the lows has as been driven by a combination government spending (particularly in the USA, Europe and China) and the reserve banks pumping money into the system.The fundamental cause of the worlds financial crisis, being the property bubble in the USA and Europe, remains a serious cause for concern. Consumers, being the drivers of economic growth, have suffered serious setbacks in their overall wealth as a result of the plummeting property values and will certainly not be spending borrowed money again in a hurry, particularly when unemployment is so high.Apart from the consumers woes, the major stumbling block to the recovery of the financial system is the fact that countries are burdened with huge budget deficits as a result of the government bailouts of the banks. which will ultimately result in taxpayers ( consumers) paying higher taxes.Emerging markets, including South Africa, have benefited from overseas financial institutions seeking higher yields and growth. This has been evidenced by massive flows into the bond and equity markets , pushing prices higher and the rand stronger. South Africa, however, is not growing at anywhere near the pace of China, India and Brasil and the flood of money has pushed the stock market to levels one would expect in an economic boom. The market may be supported by foreign inflows in the short term but the market will suffer a severe setback when the foreigners find that the carry trade is no longer attractive. Valuations always revert to fair value over time.In light of the high risk situation and market over valuation, I remain cautious and will preserve capital until markets offer long-term value.





Neave Investment Management provides an independent, professional and personalized investment management service to select clients. Investment portfolios are tailor-made to the client's risk profile and long-term goals. Asset allocation within the portfolio (by country, currency, equities, bonds and cash) is determined by the clients risk profile and my investment view on the markets. South African investment portfolios of more than 1 million rand are generally segregated (selected listed equities, bonds and cash). Investment portfolios of less than 1 million rand are generally invested in index-linked products thereby minimizing costs and ensuring performance in line with the underlying markets. Offshore investments are invested in equities, bonds and cash utilizing selected index trackers and similar low cost managed funds.

INVESTMENT PHILOSOPHY

I follow a conservative investment philosophy and will always consider the clients risk profile when making investment decisions. Capital preservation is a cornerstone of my
investment philosophy.

INVESTMENT PERFORMANCE

Investment portfolios performance is measured against pre-determined benchmarks that are set according to the clients' risk profile and long-term objectives.

INVESTMENT REPORTING

I maintain regular personal contact with all of my clients and ensure that they are kept informed of my strategies and their portfolio's performance.Portfolio reports are issued monthly and full investment reviews are prepared annually.

INVESTMENT FEES

Investment fees are charged at 1% p.a. (excluding VAT) on the first R3 million and at 0.6% p.a. (excluding VAT) on the amount over R3 million. Investment fees on portfolios over R10 million are negotiable. Investment fees are collected quarterly in arrears.

INVESTMENT SECURITY

All investments are registered in the clients name and are only placed with registered financial institutions both locally and offshore. Preferred institutions are Prescient Securities locally and Lloyds Bank TSB (Isle of Man) offshore.

INVESTMENT MANAGEMENT EXPERTISE

Investments are managed by Stewart Neave, a chartered accountant by profession with a wealth of experience in the accounting, stock broking and investment management industries. I have a reputation for providing an excellent investment management service with the highest level of integrity.



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